Choosing Among Permanent Life Insurance Options

* Whole life insurance. As the name suggests, you pay a fixed premium for the rest of your life. Money that is not used to pay for pure insurance goes into an investment account, the cash value. where it will grow at bond-like rates. These policies usually have guaranteed cash values and death benefits.

* Universal life insurance. Compared with whole life, universal life has more flexibility in paying premiums but the guarantees might not be as strong.

* Variable life insurance. Here, you direct how your cash value will be invested, choosing among several accounts that might resemble mutual funds. The better your investment performance, the greater your cash value and death benefit.

* Variable universal life insurance. Again, you have more flexibility in paying premiums than with straight variable life. This form of permanent insurance has become very popular.

If you’re comfortable with stock market risks, you can choose variable life or variable universal life and put your money into the equity accounts.